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Here's Why Investors Should Retain Euronet Stock for Now
Euronet Worldwide, Inc. EEFT is currently aided by strong segmental contribution, an enhanced payment solutions suite, acquisitions and a notable financial stand.
Zacks Rank & Price Rally
Euronet currently carries a Zacks Rank #3 (Hold).
The stock has gained 20% in the past year.
Zacks Investment Research
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Favorable Style Score
EEFT is well-poised for progress, as evidenced by its impressive VGM Score of A. Here, V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Euronet’s 2024 earnings is pegged at $8.60 per share, indicating a 15.3% increase from the year-ago reported figure. The consensus mark for revenues is $4 billion, implying 8.2% growth from the year-ago number.
The Zacks Consensus Estimate for 2025 earnings is pegged at $9.72 per share, suggesting 13% growth from the 2024 estimate. The same for revenues is $4.3 billion, which indicates a rise of 7.8% from the 2024 estimate.
Impressive Earnings Surprise History
The bottom line of EEFT outpaced estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining occasion, the average surprise being 8.14%.
Solid Return on Equity
Euronet’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 30.6% as of Sept. 30, 2024, which remains higher than the industry’s average of 19%.
Business Tailwinds
Euronet's revenue growth benefited from strong performances across its EFT Processing, epay, and Money Transfer segments, increasing 7.8% year over year in the first nine months of 2024. Management expects adjusted earnings per share to grow 10-15% year over year in 2024. It also anticipates achieving adjusted EPS growth within the same range in 2025.
The EFT Processing segment saw continued growth in travel, an expanding merchant services business and expansion into new markets, which benefited the unit’s performance. This segment processed 8.2 million transactions during the first nine months of 2024, representing a 35% year-over-year increase.
The epay segment benefited from the consistent expansion of digital media and mobile services, while the Money Transfer segment experienced strong performance driven by higher cross-border transactions and direct-to-consumer digital transactions.
Euronet's growth strategy is bolstered by acquisitions, which enhance its offerings by developing new products and services and broadening its geographic footprint. The increasing adoption of contactless payments presents a significant growth opportunity for the company to leverage its innovative payment solutions.
Euronet’s advanced suite of payment, transaction processing, and distribution solutions makes it a preferred partner for financial service providers, agents, retailers, merchants, content providers, and individual consumers. The Ren payments platform, which offers services such as payment processing, card issuing, loyalty programs, inventory and fraud management, among others, plays a pivotal role in its offerings.
Euronet's solid financial position is underscored by a strong cash balance and robust cash-generating capabilities. It generated $652.5 million in operating cash flows during the first nine months of 2024, reflecting a 28.6% increase from the same period in the previous year, enabling it to support business investments effectively.
Stocks to Consider
Some better-ranked stocks in the Finance space are BrightSphere Investment Group Inc. BSIG, Amalgamated Financial Corp. AMAL and Northeast Community Bancorp, Inc. NECB. While BrightSphere Investment currently sports a Zacks Rank #1 (Strong Buy), Amalgamated Financial and Northeast Community Bancorp carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.07%. The Zacks Consensus Estimate for BSIG’s 2024 earnings suggests an improvement of 45.5% from the year-ago reported figure. The consensus mark for revenues suggests growth of 16.6% from the year-ago reported figure. The consensus mark for BSIG’s 2024 earnings has moved 7.9% north in the past 30 days.
The bottom line of Amalgamated Financial beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 7.79%. The Zacks Consensus Estimate for AMAL’s 2024 earnings suggests an improvement of 17.7% from the year-ago reported figure. The consensus mark for revenues suggests growth of 5.3% from the year-ago reported figure. The consensus mark for AMAL’s 2024 earnings has moved 3.9% north in the past 30 days.
Northeast Community Bancorp’s earnings outpaced estimates in each of the last four quarters, the average surprise being 15.59%. The Zacks Consensus Estimate for NECB’s 2024 earnings suggests an improvement of 8.7% from the year-ago reported figure. The consensus mark for revenues suggests growth of 5.7% from the year-ago reported figure. The consensus mark for NECB’s 2024 earnings has moved 2.1% north in the past 60 days.
Shares of BrightSphere Investment, Amalgamated Financial and Northeast Community Bancorp have gained 72%, 75.6% and 72.9%, respectively, in the past year.
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